Case 2:22-md-03034-TGB ECF No. 68, PageID.2375 Filed 09/01/22 Page 1 of 32
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
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`2:22-MD-03034-TGB
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`HON. TERRENCE G. BERG
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`2:22-CV-11403-TGB
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`HON. TERRENCE G. BERG
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`JURY TRIAL DEMANDED
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` 2:22-CV-11405-TGB
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`HON. TERRENCE G. BERG
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` JURY TRIAL DEMANDED
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`IN RE NEO WIRELESS, LLC
`PATENT LITIG.
`
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`NEO WIRELESS, LLC,
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`
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`
`
`AMERICAN HONDA MOTOR
`CO., INC. & HONDA
`DEVELOPMENT &
`MANUFACTURING OF
`AMERICA, LLC,
`
`
`
`Plaintiff,
`
`
`
`v.
`
`Defendants.
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`NEO WIRELESS, LLC,
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`NISSAN NORTH AMERICA
`INC. & NISSAN MOTOR
`ACCEPTANCE CORPORATION
`a/k/a NISSAN MOTOR
`ACCEPTANCE COMPANY
`LLC,
`
`
`Plaintiff,
`
`
`
`v.
`
`Defendants.
`
`
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`

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`Case 2:22-md-03034-TGB ECF No. 68, PageID.2376 Filed 09/01/22 Page 2 of 32
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`PLAINTIFF NEO WIRELESS, LLC’S RESPONSE TO DEFENDANTS
`HONDA AND NISSAN’S MOTION TO DISMISS PLAINTIFF’S CLAIMS
`OF WILLFUL AND INDUCED PATENT INFRINGEMENT
`
`
`
`
`
`
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2377 Filed 09/01/22 Page 3 of 32
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`TABLE OF CONTENTS
`
`
`
`I.
`
`INTRODUCTION ........................................................................................... 1
`
`II. WILLFULNESS AND INDUCEMENT FACTUAL ALLEGATIONS ........ 4
`
`III. APPLICABLE STANDARD .......................................................................... 6
`
`IV. ARGUMENT ................................................................................................... 7
`
`A. Defendants’ Pre-Suit Knowledge Coupled With Its Subsequent
`Actions Allows This Court To Plausibly Infer Honda And Nissan
`Willfully Infringed. ................................................................................... 7
`
`1. Neo Plausibly Alleged Defendants Received Pre-Suit Notice
`of the Asserted Patents. ....................................................................... 8
`
`2. Defendants’ Pre-Suit Knowledge Coupled With Their
`Subsequent Actions Further Allows the Court to Infer
`Defendants’ Culpability. ...................................................................11
`
`3. At a Minimum, Neo has Plausibly Alleged Intentional
`Infringement Since the Filing of the Original Complaint. ...............14
`
`B. Neo Adequately Pleaded that Defendants Had Knowledge of and
`Encouraged Others to Directly Infringe the Asserted Patents. ...............16
`
`1. Neo Sufficiently Alleged Honda and Nissan Had Both Pre-Suit
`and Post-Suit Knowledge of the Asserted Patents. ..........................17
`
`2. Neo Sufficiently Alleged Honda and Nissan Intended to
`Induce Infringement Through a Numerous Concrete Facts
`and Examples. ...................................................................................19
`
`C. In the Alternative, Neo Requests Leave to Amend. ................................22
`
`V.
`
`CONCLUSION ..............................................................................................23
`
`
`
`
`
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`
`
`
`
`i
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2378 Filed 09/01/22 Page 4 of 32
`
`TABLE OF AUTHORITIES
`
`
`Cases
`
`Addiction & Detox. Inst., LLC v. Aharonov
` 2015 WL 631959 (E.D. Mich. Feb. 13, 2015) .....................................................11
`
`Ashcroft v. Iqbal
` 556 U.S. 662 (2009) ...........................................................................................1, 2
`
`Bayer Healthcare LLC v. Baxalta Inc.
` 989 F.3d 964 (Fed. Cir. 2021) ................................................................................ 8
`
`Bell Atlantic Corp. v. Twombly
` 550 U.S. 544 (2007) ............................................................................................... 6
`
`BillJCo, LLC v. Apple Inc.
` No. 6:21-CV-00528-ADA, 2022 WL 299733 (W.D. Tex. Feb. 1, 2022) ............15
`
`Brice Env. Servs. Corp. v. Arcadis U.S., Inc.
` 2022 WL 1032930 (D. Alaska Apr. 6, 2022) .......................................................12
`
`Crehan v. Countrywide Bank, FSB
` No. 1:11 CV 613, 2012 WL 4341049 (W.D. Mich. Feb. 15, 2012) ...................... 9
`
`DSU Med. Corp. v. JMS Co., Ltd.
` 471 F.3d 1293 (Fed. Cir. 2006) ............................................................................19
`
`Eko Brands, LLC v. Adrian Rivera Maynez Enter., Inc.
` 946 F.3d 1367 (Fed. Cir. 2020) .............................................................................. 8
`
`Ericsson Inc. v. TCL Comm. Tech. Holdings, Ltd.
` 2017 WL 5137401 (E.D. Tex. Nov. 4, 2017) .......................................................15
`
`Georgetown Rail Equip. Co. v. Holland L.P.
` 867 F.3d 1229 (Fed. Cir. 2017) .............................................................................. 8
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc.
` 579 U.S. 93 (2016) ................................................................................ 1, 7, 10, 11
`
`
`
`
`ii
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2379 Filed 09/01/22 Page 5 of 32
`
`Hilgraeve, Inc. v. Symantec Corp.
` 272 F. Supp. 2d 613 (E.D. Mich. 2003) ................................................................. 1
`
`Hill v. Snyder
` 878 F.3d 193 (6th Cir. 2017) .................................................................................. 6
`
`In re Bill of Lading Transmission & Proc. Sys. Patent Lit.
` 681 F.3d 1323 (Fed. Cir. 2012) ................................................................. 7, 16, 17
`
`In re Seagate Tech., LLC
` 497 F.3d 1360 (Fed. Cir. 2007) ........................................................................1, 15
`
`IOENGINE, LLC v. PayPal Holdings, Inc.
` 2019 WL 330515 (D. Del. Jan. 25, 2019) ................................................. 3, 11, 15
`
`JDS Techs., Inc. v. Avigilon USA Corp.
` 2015 WL 3603525 (E.D. Mich. June 15, 2015) ....................................... 10, 11, 17
`
`John Keeler & Co., Inc. v. Heron Point Seafood, Inc.
` 2016 WL 6839615 (N.D. Ohio July 8, 2016) .......................................................11
`
`Lifetime Indus., Inc. v. Trim–Lok, Inc.
` 869 F.3d 1372 (Fed. Cir. 2017) ............................................................................16
`
`Malibu Boats, LLC v. MasterCraft Boat Co., LLC
` No. 3:16-cv-82-TAV-HBG
` 2016 WL 8286158 (E.D. Tenn. Oct. 28, 2016) ............................................. 10, 11
`
`Mentor Graphics Corp. v. EVE-USA, Inc.
` 851 F.3d 1275 (Fed. Cir. 2017) ..................................................................... 13, 15
`
`Michigan Motor Techs. LLC v. Volkswagen Aktiengesellschaft
` 472 F. Supp. 3d 377 (E.D. Mich. 2020) ....................................................... passim
`
`Nalco Co. v. Chem-Mod, LLC
` 883 F.3d 1337 (Fed. Cir. 2018) ..................................................................... 16, 20
`
`National Institute for Strategic Tech. Acquisition &
` Commercialization v. Nissan of N. Am.
` No. 11-11039, 2012 WL 3600289 (E.D. Mich. Aug. 21, 2012) ............. 19, 20, 21
`
`
`
`iii
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2380 Filed 09/01/22 Page 6 of 32
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`Serv. Sols. U.S., LLC v. Autel U.S. Inc.
` No. 13-10534, 2013 WL 5701063 (E.D. Mich. Oct. 18, 2013) .............. 15, 17, 18
`
`Warner-Lambert Co. v. Apotex Corp.
` 316 F.3d 1348 (Fed. Cir. 2003) ..................................................................... 20, 21
`
`Water Techs. Corp. v. Calco Ltd.
` 850 F.2d 660 (Fed. Cir. 1988) ................................................................................ 1
`
`WCM Indus., Inc. v. IPS Corp.
` 721 Fed. Appx. 959 (Fed. Cir. 2018) ...............................................................8, 13
`
`
`Statutes
`
`35 U.S.C. § 271(b) (2012) .......................................................................................16
`
`
`Rules
`
`Fed. R. Civ. P 12(b)(6) .............................................................................. 6, 9, 12, 23
`
`
`
`
`iv
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2381 Filed 09/01/22 Page 7 of 32
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`STATEMENTS OF ISSUES PRESENTED
`
`1.
`
`
`To adequately plead willful infringement, the complaint must allege nothing
`more than the defendant had pre- or post-suit “knowledge of the patent[s].”
`IOENGINE, LLC v. PayPal Holdings, Inc., 2019 WL 330515, at *7 (D. Del.
`Jan. 25, 2019) (Bryson, J.). Neo pleaded detailed allegations of Defendants’
`pre-suit knowledge of the Asserted Patents and their infringement, and
`subsequent actions implying deliberate wrongdoing. Taking these facts as
`true and construing them in Neo’s favor, can this Court to infer Neo’s
`willfulness claims are plausible?
`
`Answer: Yes.
`2.
`
`To adequately plead inducement, the complaint must allege the defendant
`had knowledge of the Asserted Patents and took “active steps taken to
`encourage direct infringement.” DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d
`1293, 1306 (Fed. Cir. 2006). Neo pleaded detailed allegations of
`Defendants’ pre-suit knowledge of the Asserted Patents, their infringement,
`and their encouragement for customers to directly infringe the Asserted
`Patents through, among others, technical materials, “how to” webpages,
`instructions, advertisements, and training. Can this Court plausibly infer
`Defendants are liable for inducement?
`
`Answer: Yes.
`
`
`
`
`
`
`
`v
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2382 Filed 09/01/22 Page 8 of 32
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`MOST APPROPRIATE AND CONTROLLING AUTHORITIES
`
`
`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
`
`Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)
`
`DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293 (Fed.Cir.2006)
`
`Eko Brands, LLC v. Adrian Rivera Maynez Enter., Inc., 946 F.3d 1367 (Fed. Cir.
`2020)
`
`Georgetown Rail Equip. Co. v. Holland L.P., 867 F.3d 1229 (Fed. Cir. 2017)
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93 (2016)
`
`In re Bill of Lading Transmission & Proc. Sys. Patent Lit., 681 F.3d 1323 (Fed.
`Cir. 2012)
`
`Lifetime Indus., Inc. v. Trim–Lok, Inc., 869 F.3d 1372 (Fed. Cir. 2017)
`
`Nalco Co. v. Chem-Mod, LLC, 883 F.3d 1337 (Fed. Cir. 2018)
`
`WCM Indus., Inc. v. IPS Corp., 721 Fed. Appx. 959 (Fed. Cir. 2018)
`
`IOENGINE, LLC v. PayPal Holdings, Inc., 2019 WL 330515 (D. Del. Jan. 25,
`2019)
`
`JDS Techs., Inc. v. Avigilon USA Corp., 2015 WL 3603525 (E.D. Mich. June 15,
`2015)
`
`National Institute for Strategic Tech. Acquisition & Commercialization v. Nissan
`of N. Am., No. 11-11039, 2012 WL 3600289 (E.D. Mich. Aug. 21, 2012)
`
`Serv. Sols. U.S., LLC v. Autel U.S. Inc., No. 13-10534, 2013 WL 5701063 (E.D.
`Mich. Oct. 18, 2013)
`
`35 U.S.C. § 271(b) (2012)
`
`Fed. R. Civ. P. 12(b)(6)
`
`
`
`vi
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2383 Filed 09/01/22 Page 9 of 32
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`I.
`
`INTRODUCTION1
`
`As also explained in Neo’s response to Volkswagen’s motion, willfulness is
`
`a highly factual test that turns on the subjective culpability of the patent infringer.
`
`See, e.g., Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 108–10 (2016)
`
`(rejecting the rigid “objective recklessness” requirement from In re Seagate Tech.,
`
`LLC, 497 F.3d 1360 (Fed. Cir. 2007) for willfulness findings). Because evidence of
`
`state of mind is largely within the sole possession, custody, or control of the patent
`
`infringer, “[a] party may establish intent . . . through circumstantial evidence.”
`
`Hilgraeve, Inc. v. Symantec Corp., 272 F. Supp. 2d 613, 620 (E.D. Mich. 2003)
`
`(citing Water Techs. Corp. v. Calco Ltd., 850 F.2d 660, 668 (Fed. Cir. 1988)). To
`
`adequately plead willful infringement, Neo did not need to marshal all its evidence
`
`or conclusively prove Defendants’ culpable state of mind. It did not even need to
`
`plead facts indicating a probability of willful infringement. It needed only plead
`
`sufficient circumstantial facts that “nudge” the claim “across the line from
`
`conceivable to plausible.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Neo
`
`
`
` 1
`
` Neo notes that while Honda and Nissan filed a separate motion from Volkswagen
`due to some non-overlapping arguments between the two motions, the arguments
`related to willful infringement overlap substantially in both motions. Thus, while
`Neo has set forth most of its counterarguments in full in both of its responses to
`avoid confusion, the Court will find considerable repetition between the responses.
`For the Court’s reference, the discussion of willfulness in the response to
`Volkswagen’s motion is the more comprehensive of the two, while this response is
`the only one that addresses induced infringement.
`
`
`
`1
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2384 Filed 09/01/22 Page 10 of 32
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`unquestionably did so. Similarly, Defendants’ contentions that Neo’s pages of
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`inducement allegations fail for want of “actual documentation or communication,”
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`or because they are “conclusory,” completely misconstrue the pleading standard
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`with the standard of proof, and ignore the facts specifically pled to support the
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`corresponding legal conclusions.
`
`In moving to dismiss Neo’s willful infringement and inducement claims,
`
`Honda and Nissan (“Defendants”) impose a heightened pleading standard for both
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`willfulness and inducement more akin to the “probability requirement” the
`
`Supreme Court explicitly rejected in Iqbal, id. at 678; and selectively ignore
`
`important factual allegations in Neo’s Amended Complaint. Those allegations
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`indicate: Honda’s and Nissan’s actual knowledge of the Asserted Patents and their
`
`relationship to cellular standards Defendants employ in their products; the fact that
`
`the standardized technology claimed in the Asserted Patents is a core part of
`
`communications on LTE networks; Defendants’ decision to not respond to Neo’s
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`initial attempt to initiate commercial licensing discussions; their refusal to engage
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`in good faith licensing negotiations; their active decision to continue infringing the
`
`Asserted Patents despite knowledge of their infringement; and numerous concrete
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`examples of each Honda and Nissan entity’s active encouragement of others—via
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`providing technical materials, advertising, training materials, user manuals,
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`product support, marketing materials, website advertisements for how to use the
`
`
`
`2
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`

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`Case 2:22-md-03034-TGB ECF No. 68, PageID.2385 Filed 09/01/22 Page 11 of 32
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`infringing instrumentalities to its dealerships, customers, end users, and the like—
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`to directly infringe the patents-in-suit. These are not “naked assertions” that
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`defendant “was willful” or “induced infringement”; rather, Neo’s First Amended
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`Complaints pleads the above facts with specificity.
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`While discovery may uncover many additional facts about Honda’s and
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`Nissan’s internal decisions, analysis, and response to receiving Neo’s letter, the
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`pleaded factual allegations alone allow the court to draw the reasonable inference
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`that Honda and Nissan willfully infringed the Asserted Patents. As Federal Circuit
`
`Judge Bryson has said, sitting by designation in Delaware, “[t]he facts bearing on
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`willfulness are likely to be, in large measure, in the possession of the defendant
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`and available to the plaintiff only through discovery. If discovery fails to produce
`
`facts that would support a finding of willfulness, the defendant can seek to have the
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`willfulness allegations dismissed on summary judgment.” IOENGINE, LLC v.
`
`PayPal Holdings, Inc., 2019 WL 330515, at *7 (D. Del. Jan. 25, 2019) (Bryson,
`
`J.). But at the pleading stage, the court reasoned, “there is no requirement that the
`
`plaintiff plead additional facts, beyond knowledge of the patent or patents, in order
`
`for a claim to survive a motion to dismiss.” Id. The same is true here. Similarly,
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`Neo’s letter coupled with its numerous factual allegations of how Honda and
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`
`
`3
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`

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`Case 2:22-md-03034-TGB ECF No. 68, PageID.2386 Filed 09/01/22 Page 12 of 32
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`Nissan encourage others to directly infringe more than meet the baseline standard
`
`for pleading induced infringement.2
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`II. WILLFULNESS AND INDUCEMENT FACTUAL ALLEGATIONS
`
`Even leaving out allegations that arguably restate a legal standard, Neo
`
`pleaded the following purely factual allegations concerning Honda’s and Nissan’s
`
`willfulness and intent to induce others to directly infringe Neo’s Asserted Patents:
`
`• Defendants provide 4G LTE connectivity in their various brands, including
`the accused products, via the HondaLink and NissanConnect systems. Pl.
`Am. Compl., ECF No. 29 (“Honda Am. Compl.”) & ECF No. 31 (“Nissan
`Am. Compl.”) (together “Am. Compls.”), at ¶ 43.
`
`• Building on these 4G LTE capabilities, Defendants develop and utilize
`mobile apps that allows owners of its vehicles to interact with their vehicles
`from their cellular devices. Features on the apps include the ability to
`remotely start, lock, or unlock the vehicle, or to monitor the vehicle’s
`condition. Am. Compls. at ¶ 44.
`
`• Neo sent letter to Defendants on November 29, 2021. Honda Am. Compl. at
`¶ 69; Nissan Am. Compl. at ¶ 71.
`
`• Honda received the letter no later than November 30, 2021. Honda Am.
`Compl. at ¶ 69.
`
`• Nissan received the letter no later than December 1, 2021. Nissan Am.
`Compl. at ¶ 71.
`
`• Neo’s notice letter was an attempt to initiate commercial licensing
`discussions with Defendants. Honda Am. Compl. at ¶ 69; Nissan Am.
`Compl. at ¶ 71.
`
`
`
` 2
`
` It is telling that four other defendants in this multi-district litigation did not move
`to dismiss Neo’s willfulness allegations, and no other defendant moved to dismiss
`the inducement allegations, on nearly identical pleadings.
`
`
`
`4
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`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2387 Filed 09/01/22 Page 13 of 32
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`• Neo’s notice letter informed Defendants of Neo Wireless’s relevant patent
`portfolio, including listing the patents-in-suit and observing that the patents-
`in-suit cover certain 3GPP wireless standards. Id.
`
`• Defendants’ products employ those 3GPP wireless standards. E.g., Am.
`Compls. at ¶¶ 40–48.
`
`• Each of the Asserted Patents reads on portions of those 3GPP standards that
`are, for example, “a core part of communications on an LTE network,”
`“integral to the establishment of connections between [Defendants’]
`Accused Products and the serving base stations,” “central to the operation of
`the mobile devices within LTE networks,” “important to maintain accurate
`signaling between the mobile device and the serving cells in the LTE
`network,” and/or “particularly important for highly mobile devices, such as
`those implemented in [Defendants’] Accused Products.” Honda Am. Comp.
`at ¶¶ 75, 82, 89, 96, 103, 110; Nissan Am. Comp. at ¶¶ 77, 84, 91, 97, 105,
`112.
`
`• Defendants did not respond to Neo’s notice letter and refused to engage in
`any good faith licensing negotiations. Honda Am. Compl. at ¶ 69; Nissan
`Am. Compl. at ¶ 71.
`
`• Defendants continued infringing the Asserted Patents. Id.
`
`• HMC and Nissan NA’s advertising, sales, design, development, and/or
`technical materials related to the 3GPP LTE/4G and/or 5G/NR standards
`associated with the Accused Products did and continue to encourage
`customers and other third parties to directly infringe the Asserted Patents.
`Honda Am. Compl. at ¶ 62; Nissan Am. Compl. at ¶ 63.
`
`• Similarly, HDMA and NMAC’s advertising, sales, development, and
`technical materials related to the 3GPP LTE/4G and/or 5G/NR standards
`associated with the Accused Products contained and continue to contain
`instructions, directions, suggestions, and/or invitations that encourage
`customers to directly infringe the Asserted Patents. Honda Am. Compl. at ¶
`63; Nissan Am. Compl. at ¶ 64.
`
`• Each Defendant entity engaged in such inducement to promote the sales of
`the Accused Products (e.g. through user manuals, product support,
`marketing materials, technical materials, and training materials), and to
`
`
`
`5
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2388 Filed 09/01/22 Page 14 of 32
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`actively induce the end users of the Accused Products to infringe the
`Asserted Patents. Honda Am. Compl. at ¶ 64; Nissan Am. Compl. at ¶ 65.
`
`• As another example, HMC advertises on its website (cited in the Complaint)
`to its customer and other end users “How to Use the Built in 4G LTE Wi-Fi”
`on the Accused Products, and Nissan NA does the same on its website.
`Honda Am. Compl. at ¶ 65; Nissan Am. Compl. at ¶ 66.
`
`• HMC, HDMA, and Nissan NA further advertise and provide their customers
`and end users with specifications describing the Accused Instrumentalities
`and how they are used in the Accused Products. Honda Am. Compl. at ¶ 66;
`Nissan Am. Compl. at ¶ 67.
`
`• NMAC, as the reseller for its customers’ lease returns, also provides the
`above-mentioned specs and encourages its customers and end users to use
`Nissan’s NissanConnect and other infringing features in the resold Accused
`Products with a deliberate disregard for its known infringement of the
`Asserted Patents. Nissan Am. Compl. at ¶ 68.
`
`III. APPLICABLE STANDARD
`
`The standard for surviving a motion to dismiss under FRCP 12(b)(6)
`
`imposes a low threshold upon pleadings requiring the plaintiff to plead “enough
`
`facts to state a claim for relief that is plausible on its face.” Bell Atlantic Corp. v.
`
`Twombly, 550 U.S. 544, 570 (2007). For a claim to be facially plausible “simply
`
`calls for enough fact to raise a reasonable expectation that discovery will reveal
`
`evidence of [liability].” Id. at 556. In evaluating a motion to dismiss, courts must
`
`construe the allegations “in the light most favorable to the plaintiff” with
`
`reasonable inferences made accordingly. Michigan Motor Techs. LLC v.
`
`Volkswagen Aktiengesellschaft, 472 F. Supp. 3d 377, 385 (E.D. Mich. 2020)
`
`(citing Hill v. Snyder, 878 F.3d 193, 203 (6th Cir. 2017)). Importantly, “[n]othing
`
`
`
`6
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2389 Filed 09/01/22 Page 15 of 32
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`in Twombly or its progeny allows a court to choose among competing inferences as
`
`long as there are sufficient facts alleged to render the non-movant’s asserted
`
`inferences plausible.” In re Bill of Lading Transmission & Proc. Sys. Patent Lit.,
`
`681 F.3d 1323, 1340 (Fed. Cir. 2012).
`
`IV. ARGUMENT
`
`A. Defendants’ Pre-Suit Knowledge Coupled With Its Subsequent
`Actions Allows This Court To Plausibly Infer Honda And Nissan
`Willfully Infringed.
`
`Defendants’ proposed heightened pleading standard for willful infringement
`
`is impractical, contrary to the Federal Circuit, and misconstrues the Eastern District
`
`of Michigan’s ruling in Michigan Motor.3 A plaintiff must allege sufficient facts to
`
`support an inference that the “conduct infringing the patents [] was willful, wanton,
`
`malicious, bad-faith, deliberate, consciously wrongful, or flagrant.” Michigan
`
`Motor, 472 F. Supp. 3d at 385. Alleging intentional (“deliberate,” “consciously
`
`wrongful”) infringement meets these criteria. See, e.g., Halo, 579 U.S. at103–04
`
`(“the full range of culpable behavior” includes “willful,” “deliberate,” or
`
`“consciously wrongful”); see also Eko Brands, LLC v. Adrian Rivera Maynez
`
`
`
` 3
`
` Defendants argue in footnote 1 of their Motion to Dismiss the same three-prong
`pleading standard for willful infringement that Volkswagen argued in its Motion to
`Dismiss, Dkt. 53. For the sake of efficiency, Neo directs the Court to Neo’s Response
`to Volkswagen’s Motion to Dismiss on pages 6–11, detailing why Federal Circuit
`law has rejected this overly stringent pleadings standard.
`
`
`
`7
`
`

`

`Case 2:22-md-03034-TGB ECF No. 68, PageID.2390 Filed 09/01/22 Page 16 of 32
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`Enter., Inc., 946 F.3d 1367, 1378 (Fed. Cir. 2020) (determining willfulness only
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`“requires a jury to find no more than deliberate or intentional infringement”);
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`WCM Indus., Inc. v. IPS Corp., 721 Fed. Appx. 959, 969 (Fed. Cir. 2018)
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`(willfulness facts are sufficient if proven defendant “acted despite a risk of
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`infringement that was either known or so obvious that it should have been
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`known”); Georgetown Rail Equip. Co. v. Holland L.P., 867 F.3d 1229, 1245 (Fed.
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`Cir. 2017) (affirming willfulness verdict based solely on “evidence that [defendant]
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`was aware of the [asserted patent] prior to the current litigation . . . and believed
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`that it was infringing the patent”); Bayer Healthcare LLC v. Baxalta Inc., 989 F.3d
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`964, 988 (Fed. Cir. 2021) (same).
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`1. Neo Plausibly Alleged Defendants Received Pre-Suit Notice of the
`Asserted Patents.
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`Defendants’ arguments fail at each turn, particularly in their claim regarding
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`Neo’s pleading of pre-suit knowledge of the Asserted Patents. In fact, Neo has
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`adequately alleged pre-suit notice of the patents-in-suit and Defendants’
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`infringement—in a pleading far more detailed than the one rejected in Michigan
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`Motor—and that allegation alone supports a plausible inference of willful
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`infringement.
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`In Michigan Motor, the court granted the defendant’s motion to dismiss
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`where the Plaintiff asserted only the following regarding a pre-suit notice letter:
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`Case 2:22-md-03034-TGB ECF No. 68, PageID.2391 Filed 09/01/22 Page 17 of 32
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`Defendants were made aware of the patents-in-suit at least as early as
`March 4, 2015, when [they were] provided notice of the patents via
`letter.
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`Michigan Motor, 472 F. Supp. 3d at 380. The court declined to credit the
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`allegation, because it did not “specif[y] what the letter stated, did not mention who
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`sent the letter, and did not mention to whom the letter actually was sent.” Id.
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`Consequently, the court concluded “there are too many dots to connect before the
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`Court can arrive at finding that the letter indeed was sent to the defendants or their
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`agents and that it informed the defendants that they were potentially infringing on
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`[the plaintiff’s] patents.” Id.4
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`Here, unlike the plaintiff in Michigan Motor, Neo’s complaints specified (1)
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`who sent the letter (“Neo sent a letter”); (2) to whom the letter was sent (“to
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`HMC”/“to Nissan NA”); (3) the date the letter was sent (“on November 29,
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`2021”); (4) the date in which Defendants received the letter (“that Honda received
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`no later than November 30, 2021”/“that Nissan received no later than December 1,
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` While unnecessary for resolution of this motion, Neo respectfully observes that
`even this allegation—which alleged a specific fact (the sending of a letter on a
`certain date), and not just a bare legal conclusion—likely passed muster under
`Twombly/Iqbal and should have been treated as true. Cf., e.g., Crehan v.
`Countrywide Bank, FSB, No. 1:11 CV 613, 2012 WL 4341049, at *6 (W.D. Mich.
`Feb. 15, 2012) (denying 12(b)(6) motion because while allegation was “arguably
`vague it is not a legal conclusion, but is instead a factual assertion.”), report and
`recommendation adopted, No. 1:11-CV-613, 2012 WL 4340848 (W.D. Mich. Sept.
`20, 2012).
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`Case 2:22-md-03034-TGB ECF No. 68, PageID.2392 Filed 09/01/22 Page 18 of 32
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`2021”); (5) the letter’s reference to the Asserted Patents (“informing Honda/Nissan
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`of Neo Wireless’s relevant patent portfolio, including listing the patents-in-suit”);
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`and (6) the letter’s reference to 3GPP wireless standards (“and how the patents-in-
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`suit cover certain 3GPP wireless standards”). Honda Am. Compl. at ¶ 69; Nissan
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`Am. Compl. at ¶ 71.
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`These are not “naked allegations” as Defendants’ suggest, as there is more
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`than enough detail in these allegations for the Court to accept them as true, and
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`reasonably infer that these letters were in fact sent and received. Courts have
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`accepted allegations of pre-suit notice as true on far less specific pleadings. See,
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`e.g., JDS Techs., Inc. v. Avigilon USA Corp., 2015 WL 3603525, at *2 (E.D. Mich.
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`June 15, 2015) (allowing inference of pre-suit notice of patents even without actual
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`notice letter, based on allegations of product marking, display of patent numbers at
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`trade shows, and assertion of patents in separate lawsuit against third party);
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`Malibu Boats, LLC v. MasterCraft Boat Co., LLC, No. 3:16-cv-82-TAV-HBG,
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`2016 WL 8286158, at *4 (E.D. Tenn. Oct. 28, 2016) (denying motion to dismiss
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`because of defendant’s “alleged correspondence with [plaintiff’s] patent
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`prosecution counsel” about imminent issuance of asserted patent).
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`As discussed in more detail in response to Volkswagen’s motion: although
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`dicta in Michigan Motor may suggest otherwise, this Court’s inquiry should end
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`here. Contrary to Defendants’ contentions, Halo did not change the pleading
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`Case 2:22-md-03034-TGB ECF No. 68, PageID.2393 Filed 09/01/22 Page 19 of 32
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`standard, and ample pre- and post-Halo authority suggests that the above
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`allegations of pre-suit notice alone, with an allegation of willful infringement,
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`survive a motion to dismiss. More may be required to prove willful intent, but
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`knowledge of the patent allows a court, at the pleading stage, to reasonably infer
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`that intent and allow the case to proceed. See JDS Technologies, 2015 WL
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`3603525, at *2 (citing Sony Corp. v. LG Elecs. U.S.A., Inc., 768 F. Supp. 2d 1058,
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`1064 (C.D. Cal. 2011); IOENGINE, 2019 WL 330515, at *7.5
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`2. Defendants’ Pre-Suit Knowledge Coupled With Their Subsequent
`Actions Further Allows the Court to Infer Defendants’
`Culpability.
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`Even if this Court is persuaded that Neo had to allege more than mere
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`knowledge of the Asserted Patents to plead willfulness, Neo’s remaining
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`allegations concerning Defendants’ awareness of their infringement and the
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`recklessness of their post-notice actions further bolster the plausibility of Neo’s
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`allegations of intentional, willful infringement.
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` See also Addiction & Detox. Inst., LLC v. Aharonov, 2015 WL 631959, at *2 (E.D.
`Mich. Feb. 13, 2015) (dismissing willful infringement claim only because it did “not
`recite specific facts explaining if and when the defendants had knowledge of the
`[asserted patent].”); Malibu Boats, 2016 WL 8286158, at *4; John Keeler & Co.,
`Inc. v. Heron Point Seafood, Inc., 2016 WL 6839615, at *4 (N.D. Ohio July 8, 2016)
`(explaining that plaintiff “need not allege specific facts establishing objective
`recklessness, [but] must, at least, allege sufficient facts to create a plausible inference
`that Defendant had knowledge of patents-in-suit prior to the filing of the
`Complaint.”).
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`Case 2:22-md-03034-TGB ECF No. 68, PageID.2394 Filed 09/01/22 Page 20 of 32
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`First, Neo’s notice letters did not merely alert Honda and Nissan to the
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`existence of its patent portfolio. Rather, as alleged in the Complaint, Neo’s letter:
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`(i) listed the patents-in-suit, (ii) informed Defendants that the patents covered
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`3GPP cellular standards; and (iii) attempted to initiate commercial licensing
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`discussions. Honda Am. Compl. at ¶ 69; Nissan Am. Compl. at ¶ 71. Furthermore,
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`as Neo’s Complaints adequately allege, Honda and Nissan practice the 3GPP
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`standards identified in Neo’s letter. Am. Compls. at ¶¶ 40–48. And Defendants
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`would have had all the more reason to realize they were infringing the Asserted
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`Patents by practicing those standards since, as Neo further alleges, the Asserted
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`Patents cover “core” and “important” aspects of those standards for use in the
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`Accused Products. Honda Am. Compl. at ¶¶ 75, 82, 89, 96, 103, 110; Nissan Am.
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`Compl. at ¶¶ 77, 84, 91, 97, 105, 112. And of course, the Court must accept as true
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`for this motion that Defendants do in fact infringe the Asserted Patents, as alleged.
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`Thus, more than mere knowledge of the Asserted Patents’ existence, these
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`allegations collectively allow the Court to reasonably infer that Volkswagen
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`learned of its infringement of those patents (or was willfully blind to it), and
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`willfully infringed thereafter. Cf. Brice Env. Servs. Corp. v. Arcadis U.S., Inc.,
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`2022 WL 1032930, at *9 (D. Alaska Apr. 6, 2022) (denying 12(b)(6) where
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`plaintiff alleged it sent a notice letter that identified the patent and merely “stat[ed]
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`a concern” about the defendant’s infringement).
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`Case 2:22-md-03034-TGB ECF No. 68, PageID.2395 Filed 09/01/22 Page 21 of 32
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`Regarding Defendants’ willful infringement thereafter, Neo also specifically
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`alleged Honda and Nissan chose not to respond to Neo’s detailed licensing letter,
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`refused to engage in good faith licensing negotiations, and continued to actively
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`infringe the Asserted Patents despite knowledge of its infringement. Honda Am.
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`Compl. at ¶ 69; Nissan Am. Compl. at ¶ 71. Additionally, to demonstrate
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`Defendants’ inducement